Compare short-term rental (Airbnb/STR) vs long-term rental (LTR) net income side by side. Factor in higher STR revenue but also higher expenses and vacancy.
Should you list your rental property as a short-term rental (STR) on Airbnb or keep it as a traditional long-term rental (LTR)? STRs typically generate 1.5–3x more gross revenue but come with significantly higher operating expenses, greater management demands, and more income volatility. The right choice depends on your market, property type, and tolerance for active management.
This calculator compares both strategies side by side using the same property. Enter the STR gross revenue and expenses on one side, and the LTR monthly rent and expenses on the other. The result shows annual net income, expense ratios, and the premium (or deficit) of STR over LTR.
For many investors, the break-even occupancy rate — the minimum STR occupancy needed to match LTR income — is the most important metric. If your market supports occupancy well above break-even, STR is the better play. If occupancy barely meets break-even, the added risk and effort of STR may not be justified.
Most investors compare only gross revenue, which dramatically overstates the STR advantage. After accounting for cleaning, platform fees, supplies, higher utilities, management, and vacancy risk, many STRs underperform LTRs. This calculator compares true net income to reveal which strategy actually puts more money in your pocket. Instant recalculation lets you compare scenarios side by side, so every buying, selling, or investment decision is grounded in solid financial analysis.
STR Gross = Nightly Rate × Occupancy × 365 STR Net = STR Gross − STR Expenses LTR Gross = Monthly Rent × 12 × (1 − Vacancy Rate) LTR Net = LTR Gross − LTR Expenses STR Premium = STR Net − LTR Net Break-Even Occupancy = (LTR Net + STR Fixed Expenses) / (Nightly Rate × 365 − Variable Cost per Night)
Result: STR Net: $36,478 vs LTR Net: $17,712
STR gross: $175 × 263 nights = $46,025; after $9,547 in STR expenses, net = $36,478. LTR gross: $1,800 × 12 × 95% = $20,520; after $2,808 in LTR expenses, net = $17,712. STR produces $18,766 more annually — but requires significantly more management effort and carries higher risk.
While net income is the primary comparison metric, consider these qualitative factors. STR requires 5–10x more management time. STR offers personal use flexibility (block dates for yourself). LTR provides stable, predictable cash flow ideal for debt service. STR properties appreciate based on STR potential, which may not persist if regulations change. LTR has lower tenant liability concerns.
STR vs LTR economics vary dramatically by market. Tourist destinations (beach, ski, downtown) strongly favor STR. Suburban family neighborhoods often favor LTR. College towns may favor mid-term rentals. Research your specific market's STR performance data using tools like AirDNA before making assumptions.
Many investors are adopting hybrid strategies: list as STR during peak season (commanding premium rates), switch to mid-term (30+ day) rentals during slower months to maintain occupancy without excessive turnover costs, and keep one month for personal use or maintenance. This approach can capture 80–90% of full-time STR revenue with lower operating costs.
In strong STR markets, gross revenue is typically 1.5–3x a long-term rental. However, after STR-specific expenses (cleaning, platform fees, furnishing, supplies, higher management), net income is usually 1.2–2x LTR net income. In some markets, LTR is actually more profitable after all costs.
Break-even occupancy is the minimum STR occupancy rate where STR net income equals LTR net income. If your expected occupancy exceeds break-even by a wide margin, STR is clearly better. If it's close, the extra effort and risk of STR may not justify the marginal income gain.
Key risks include regulatory changes (cities banning or restricting STRs), seasonal income volatility, higher wear and tear, guest damage, negative reviews impacting bookings, platform policy changes, and the significant time commitment of management. LTRs offer more predictable, hands-off income.
Yes. STR operating expenses typically run 35–55% of gross revenue versus 25–40% for LTRs. The biggest difference is cleaning costs ($6,000‒20,000/year), platform fees (3–16% of revenue), furnishing amortization, supplies, and higher utility usage from constant guest turnover.
Mid-term rentals (30+ day stays) offer a middle ground: higher rates than LTR (20–60% premium), lower turnover costs than STR, often exempt from STR regulations, and appeal to traveling professionals, relocating families, and insurance claimants. It's an increasingly popular strategy.
Most conventional lenders underwrite based on long-term rental income. STR income may not be fully recognized by lenders, requiring larger down payments or portfolio/DSCR loans. Some STR lenders now use projected STR revenue for qualification, but rates may be higher.